December 28, 2017 / 7:23 AM / 6 months ago

METALS- China demand outlook drives LME copper to fresh 4-yr high

By James Regan

SYDNEY, Dec 28 (Reuters) - London copper hit a fresh four-year high on Thursday on signs of strong demand from China next year.

Commodities traders said some profit taking emerged at the higher end of copper's price rise, but was held in check somewhat by a weaker U.S. dollar.

Non-U.S. holders of U.S. dollar-denominated commodities, such as London Metal Exchange contracts, typically sell into a stronger dollar.

* Three-month copper on the London Metal Exchange rose 0.8 percent to $7,297 a tonne by 0700 GMT, its highest since January 2014, when it hit $7,460 a tonne, according to Thomson Reuters data.

Prices of the metal used widely in power and construction are up 30 percent in the year to date.

* The most-traded copper contract on the Shanghai Futures Exchange ended 1.2 percent up at 55,770 yuan ($8,525.44) a tonne.

* COPPER TC/RC SET: China's leading copper smelter Tongling Nonferrous Metals Group has agreed with Freeport-McMoRan Inc for treatment and refining charges (TC/RCs) at $82.25 per tonne and 8.225 cents per pound as the 2018 benchmark, a company source with the smelter told Reuters on Wednesday.

CAPACITY AND INVENTORIES: Bullish sentiment in the aluminium market was reinforced by news that China's government has criticised officials in the industrialised province of Shandong for deceiving authorities to evade capacity cuts in the polluting coal, steel, aluminium and chemicals sectors.

However, aluminium stocks in warehouses AL-STX-SGH monitored by the Shanghai Futures Exchange, at a record 741,324 tonnes, suggest surpluses in China, the world's largest producer and consumer of the metal.

* DOLLAR DOWN: The dollar slid broadly on Thursday, hampered by a recent dip in U.S. 10-year bond yields, while commodity-linked currencies were bolstered by this week's rally in metals and oil prices.

* OTHER METALS: The remainder of active ShFE base metals contracts ended firmer, led by aluminium, up 2.68 percent and nickel 1.8 percent.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.5416 Chinese yuan)

Reporting by James Regan; Editing by Michael Perry and Amrutha Gayathri

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